With Dividends Back in Style, This Dog Could Have Its Day
High dividend strategies like the
ALPS Sector Dividend Dogs ETF (SDOG) are back in style, and the value resurgence and low interest rates are just two reasons why.
SDOG tries to reflect the performance of the S-Network Sector Dividend Dogs Index, which applies the “Dogs of the Dow Theory” on a sector-by-sector basis using the S&P 500 with a focus on high dividend exposure. SDOG’s equal-weight methodology is important because it reduces sector-level risk and dependence of some groups that are considered to be imperiled value ideas.
History shows that after high dividend stocks lag the broader market by wide margins, as was the case last year, they often enjoy long subsequent periods of outperformance.